A group of investors led by the $40.1 billion Iowa Public Employees’ Retirement System, Des Moines, has reached a $499 million partial settlement in an antitrust lawsuit alleging that Morgan Stanley, Goldman Sachs, UBS, J.P. Morgan Chase & Co., Credit Suisse, Bank of America and bank joint venture EquiLend participated in a group boycott to stop the modernization of the securities lending market.
The partial settlement will leave Bank of America as the sole remaining defendant in the case, according to a closed session board meeting of one of the named plaintiffs, the $73.6 billion Los Angeles County Employees Retirement Association , Pasadena, Calif. The case is being heard in U.S. District Court in New York by Judge Katherine Polk Failla. Combined with the $81 million settlement previously signed with Credit Suisse in 2022, the partial settlement will result in a total of $580 million in cash payments to the class.
As part of the current settlement, EquiLend has agreed to specific reforms to prevent the sort of collusion and market abuse that occurred in this case as well as to provide cooperation with the ongoing lawsuit against Bank of America, said a news release from plaintiffs’ co-lead counsel Cohen Milstein Sellers & Toll.
Read Investors Reach Partial Settlement with Banks in Antitrust Suit.
Investors who have accused major banks of colluding to thwart modernization of the trillion-dollar stock loan market asked a New York federal judge Wednesday to greenlight a nearly $500 million settlement reached with JPMorgan, Morgan Stanley, Goldman Sachs and two other lending institutions.
The financial institutions, along with UBS and EquiLend, agreed to make a cash payment of $499 million and implement governance changes, like an antitrust code of conduct, for EquiLend — a joint securities lending platform started by the defendant banks, according to the motion for preliminary approval.
The defendants also agreed to cooperate in the investors’ litigation against Bank of America, the only defendant remaining in the case, the motion states.
The nearly $500 million cash payment will be added to the $81 million that Credit Suisse agreed to pay last year to be the first bank to exit the proposed class action, the investors said. The Credit Suisse settlement received preliminary approval in February 2022.
“This is a significant sum and places this settlement among the larger antitrust settlements reached in the past decade,” the investors said. “The new settlement agreement includes forward-looking measures that plaintiffs believe will further promote a competitive market for all stock-loan market participants.”
“It is rare that private plaintiffs (as opposed to the [U.S. Department of Justice] or [Federal Trade Commission]) are able to achieve such reforms as part of the settlement of a purely civil lawsuit,” they added.
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The investors’ attorneys from Quinn Emanuel Urquhart & Sullivan LLP and Cohen Milstein Sellers & Toll PLLC applauded the “historic settlement” in a statement to Law360 on Wednesday evening.
“Together with the earlier settlement with Credit Suisse, we have now recovered $581 million from the settling banks,” the attorneys said. “This is a significant sum and places the stock loan settlement among the larger antitrust settlements reached in the past decade.”
“Of equal significance, the settlement includes significant forward-looking relief that the plaintiffs believe is designed to prevent collusion and market abuse in the stock loan industry in the future,” they added. “We look forward to continuing to prosecute the case against the lone holdout bank, Bank of America.”
The investor plaintiffs are represented by Quinn Emanuel Urquhart & Sullivan LLP and Cohen Milstein Sellers & Toll PLLC.
Read 5 Financial Institutions Ink $500M Stock Loan Antitrust Deal. (Subscription required.)
Goldman Sachs, Morgan Stanley, JPMorgan and UBS resolve long-running antitrust allegations from pension funds
Goldman Sachs, Morgan Stanley, JPMorgan Chase and UBS have agreed to pay almost $500mn to settle a long-running lawsuit alleging they violated antitrust laws by blocking efforts to modernise the opaque $2.7tn stock lending market.
In a settlement announced on Wednesday, the banks will pay $499mn to a class of investors led by several US pension funds from Iowa, Los Angeles, Orange County and Sonoma County.
EquiLend, an industry-owned platform for electronic securities lending and borrowing, was also part of the settlement. Credit Suisse agreed to pay $81mn in 2022 to settle the case. The action is ongoing against Bank of America, another defendant.
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“We’re very pleased to have partially settled this case and had such an impact on how EquiLend operates. We are looking forward to continuing to hold Bank of America accountable as the case progresses,” said Michael Eisenkraft, partner at Cohen Milstein Sellers & Toll,who represented the plaintiffs alongside Quinn Emanuel.
Read Banks Agree Near $500Mn Settlement in Stock-Lending Lawsuit. (Subscription required)
A majority of S&P 500 companies now disclose having diverse board candidate search policies, known as Rooney Rules, for director searches, according to new data from search firm Spencer Stuart. Some 56% of the S&P 500 report having a policy like the Rooney Rule, up from 50% in 2022 and 39% in 2021.
Companies including Devon Energy, Dollar General, Hess Corp., Moody’s Corp., Sealed Air Corp., Southern Company, Tractor Supply Co. and W.W. Grainger Inc., among others, disclosed having Rooney Rule policies in SEC filings this year. The Rooney Rule is a strategy that calls for organizations to interview women and minority candidates for open positions. Experts have debated the most effective number of diverse candidates to include in such policies.
Investors and proxy advisors have continued to screen companies based on whether or not they have a Rooney Rule policy in place and disclosed. Despite the recent political pushback on DEI initiatives, boards are working to not only nominate underrepresented members to the board but elevate those voices once they are in the boardroom. However, the effectiveness of the Rooney Rule varies depending on whom you ask, and sources told Agenda that it should be one tool in the toolkit to hire the most diverse and qualified candidates.
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“Saying ‘Oh, we have a Rooney Rule’ is never enough without meaningful steps to support the intent of the rule,” said Julie Goldsmith Reiser, partner at Cohen Milstein and co-chair of the securities litigation and investor protection practice.
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Strategies to further diversify boardrooms are “tied to economic performance driven by the bottom line, not just the idea to have diversity for diversity’s sake,” Reiser said.
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According to Reiser, boards need to focus on skill sets first and foremost. She also recommends that the panel interviewing board candidates also reflect diversity in terms of backgrounds, race, gender, ethnicity and skill sets.
“It’s great companies are looking to interview a diverse slate of candidates, but there’s a slight concern that maybe [companies and] search firms are focusing on all the same people or putting someone into the mix to interview without the right skill set,” Reiser said. But, she added, “it’s really about the ongoing commitment, not just the interview process,” Reiser said.
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Companies have also expressed concern over the potential impact of the Supreme Court’s recent ruling related to affirmative action policies at educational institutions.
“We have had a great push towards diversity and inclusion that has now hit the high note, and maybe we will start moving back the other way,” Reiser said. “But hopefully not.”
Read More Boards Adopt Rooney Rule Policies.
A Sixth Circuit panel on Thursday revived Tennessee property owners’ suit seeking to recover from the federal government $82 million in damages they suffered from the 2016 Chimney Tops 2 Fire, finding in a published opinion that the plaintiffs gave the appropriate agency notice of their claims that they weren’t warned of the fire dangers.
The district court erred in finding that property owners didn’t satisfy the Federal Torts Claims Act requirement that they provide notice of their claims that, through its employees, the federal government failed to properly warn neighbors of the potential impact the wildfire would have on their lives and property, the panel said Thursday.
The property owners met the not “particularly high bar” in presenting their failure-to-warn claims to the relevant government agency, in this case, the Department of Interior, through a form called the SF95, according to the opinion authored by U.S. Circuit Judge Helene N. White.
“In light of this ‘minimal notice’ requirement and the facts presented, the district court erred in finding that plaintiffs failed to satisfy the presentment requirement,” the panel said.
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Ted Leopold of Cohen Milstein Sellers & Toll PLLC, who also represents the plaintiffs, said they were “extremely happy” with the ruling.
“We now look forward to litigating these cases on the merits and providing a full measure of justice for the hundreds of our clients who lost their properties, their dreams and, in many instances, lost their lives, all as a result of the federal government’s failure to properly and timely act during the Gatlinburg, Tennessee, fire,” he said in an email statement.
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Residents began suing the federal government in 2017 after the 2016 fire spilled out of the Great Smoky Mountains National Park, alleging National Park Service employees didn’t follow the park’s fire management plan, which required park visitors and local residents to be notified when any type of fire management activity could impact them.
The opinion said the fire began in the park on Nov. 23, 2016, across less than an acre. Over the next four days, the fire grew to about 40 acres and was still contained within the park. On Nov. 27, 2016, firefighters were released for the night, and the fire was not monitored overnight.
The National Weather Service issued a high-wind warning at about 4 a.m. Nov. 28, 2016, saying that wind gusts could reach up to 60 mph, according to the opinion. By 6 p.m., the fire had grown to more than 5,000 acres and was impacting nearby neighborhoods.
Fourteen people died, 191 people were injured, more than 2,500 structures were destroyed, more than 17,000 acres of land burned and more than $1 billion in damages was caused by the fire, which was fully extinguished in mid-December 2016, according to the opinion.
Plaintiffs filed administrative claims with the Department of Interior through the SF95 form. The agency didn’t act on the claims, so plaintiffs sued.
Read 6th Circ. Revives Deadly $82M Wildfire Damage Suit.
A federal lawsuit filed by survivors of the 2016 Gatlinburg wildfires can now continue after a federal appellate panel reversed a lower court’s decision to dismiss the claims against the National Park Service.
All three judges on the federal panel ruled in favor of overturning U.S. District Judge Ronnie Greer’s decision to dismiss the lawsuit last year. Greer wrote in his ruling that it was dismissed largely due to errors in the families’ initial filing.
He said that the lawsuit did not include a necessary claim that the park had a duty to warn its neighbors and forms submitted to claim damage, injury, or death were missing specific pieces of information. An attorney representing the families called the decision “totally wrong” and filed a federal appeal in March 2022.
A lawsuit filed by several insurance companies was allowed to continue because they included the necessary ‘failure to warn’ charge.
The ruling remands the case back to the United States District Court for the Eastern District of Tennessee for further court proceedings.
“We are extremely happy with today’s ruling from the 6th Circuit Court of Appeals,” said Ted Leopold, plaintiffs’ counsel at Cohen Milstein. “We now look forward to litigating these cases on the merits and providing a full measure of justice for the hundreds of our clients who lost their properties, their dreams, and in many instances, lost their lives, all as a result of the federal government’s failure to act quickly during the Gatlinburg fire.”
Watch Gatlinburg Wildfire Survivors’ Lawsuit Back On After Judges Overturn Dismissal.
- Appeals court says victims gave adequate notice of allegations
- 2016 fire killed 14, damaged hundreds of buildings
A U.S. appeals court on Thursday revived lawsuits against the federal government by victims of the 2016 Great Smoky Mountains wildfires, which killed 14 people and caused over $1 billion in damage.
A three-judge panel of Cincinnati-based 6th U.S. Circuit Court of Appeals vacated a lower-court judge’s dismissal of lawsuits alleging that park officials failed to warn the public of the pending danger of the fire after spotting it.
U.S. Circuit Judge Helene White, writing for the panel, said the hundreds of Tennessee residents who were injured, lost loved ones or had their property damaged had given the U.S. Interior Department adequate notice of their allegations to proceed, despite the district court judge’s determination otherwise.
White said the victims “need not articulate the precise cause of action” when initially notifying the government of damages claims under the Federal Tort Claims Act. That law requires people seeking damages from the federal government to submit administrative claims before filing formal legal complaints.
The U.S. Interior Department did not immediately respond to a request for comment.
Theodore Leopold, a lawyer with the law firm Cohen Milstein Sellers & Toll who represents the victims, said in a statement that they “now look forward to litigating these cases on the merits.”
The 2016 wildfires burned approximately 17,000 acres in eastern Tennessee and caused extensive damage to hundreds of buildings in and around the city of Gatlinburg.
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For the victims: Diana Martin and Theodore Leopold of Cohen Milstein Sellers & Toll; and Gordon Ball
Read Wildfire Lawsuits Against US Over 2016 Tennessee Blaze Revived.
A proposed class of workers at a red meat processing plant have reached a $10 million settlement with Seaboard Foods LLC and a cooperation agreement with Triumph Foods LLC in their suit alleging the companies and others conspired to keep wages in the industry low.
In a motion for preliminary approval filed Monday, the proposed class, led by named plaintiffs Ron Brown, Minka Garmon and Jessie Croft, said Seaboard has agreed to pay $10 million into a non-reversionary fund to be distributed to the class, while both Seaboard and Triumph have agreed to provide documents and information to be used as evidence in proceedings against the other defendants.
The trio first sued Seaboard, Triumph, JBS USA, Cargill, Tyson Foods, Perdue Farms and others in November, alleging they shared compensation studies and data and collaborated with supposed competitors to ensure uniform, industry-wide pay policies in violation of federal antitrust laws.
Purdue settled the claims in this suit and another, similar suit regarding the poultry industry in December, and the plaintiffs moved for preliminary approval of that $1.125 million deal in March, according to court documents. All the other defendants remain in the litigation.
According to Monday’s motion, the settlement class will encompass all persons employed by Seaboard or its subsidiaries between Jan. 1, 2014, and the preliminary approval date of the settlement.
The workers said the $10 million deal was reached through fair negotiations and is preferable compared to the risks of prolonged litigation, given that there are questions of law and fact that could be difficult to prove to a jury.
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The proposed class is represented by Shana E. Scarlett of Hagens Berman Sobol Shapiro LLP, George F. Farah of Handley Farah & Anderson PLLC, and Brent W. Johnson of Cohen Milstein Sellers & Toll PLLC.
Read Meat Plant Workers Ink $10M Agreement In Wage Cabal Suit.
- Antitrust lawsuit seeks up to $1.6 billion in damages
- Class consists of more than 1,200 current and former UFC fighters
A U.S. judge in Nevada on Wednesday said a group of martial arts fighters suing the Ultimate Fighting Championship for alleged suppression of their wages can move forward as a class action seeking damages estimated at between $811 million and $1.6 billion.
U.S. District Judge Richard Boulware’s decision grants class-action status to more than 1,200 fighters who competed in live professional UFC-promoted mixed martial arts bouts in the U.S. between December 2010 and June 2017.
The plaintiffs contend Nevada-based Zuffa, which does business as the UFC, abused its market power to acquire or block rival promoters and used exclusive contracts to keep fighters within the UFC. The plaintiffs alleged the UFC suppressed fighters’ bout compensation.
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For the class: Eric Cramer of Berger Montague; Benjamin Brown of Cohen Milstein Sellers & Toll; and Joseph Saveri of Joseph Saveri Law Firm
Read Martial Arts Fighters’ Wage Lawsuit Against UFC Can Proceed as Class Action.
A Nevada federal judge gave Ultimate Fighting Championship fighters a crucial, long-awaited win Wednesday with the certification of one of two proposed classes in an antitrust suit alleging the organization repressed wages by up to $1.6 billion through coercive, exclusive contracts and the purchase of rival promoters.
U.S. District Judge Richard F. Boulware II certified a class of fighters who competed in at least one professional UFC mixed martial arts bout in the U.S. between December 2010 and June 2017, and he refused to certify a class of fighters whose identities were used in licensed merchandise or promotional materials.
Judge Boulware’s 80-page ruling came down to crediting the statistical model created by the plaintiff fighters’ expert economist, Hal J. Singer, while rejecting arguments from UFC parent company Zuffa LLC as the judge weighs allegations the organization has an illegal monopsony on the buyer-side market of purchasing fighter services.
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The fighters are represented by Eric L. Cramer, Michael Dell’Angelo, Patrick F. Madden, Joshua P. Davis and Mark R. Suter of Berger Montague, Joseph R. Saveri, Jiamin S. Chen and Kevin E. Rayhill of Joseph Saveri Law Firm LLP, Benjamin D. Brown, Richard A. Koffman and Daniel H. Silverman of Cohen Milstein Sellers & Toll PLLC, Bradley S. Schrager of Wolf Rifkin Shapiro Schulman & Rabkin LLP, Robert C. Maysey and Jerome K. Elwell of Warner Angle Hallam Jackson & Formanek PLC, William G. Caldes of Spector Roseman Kodroff & Willis PC, John D. Radice of Radice Law Firm PC and Frederick S. Schwartz of The Law Office of Frederick S. Schwartz.